Yukon: things are looking up

For a while, it seemed the Yukon was doomed. You had mines shutting down without paying contractors, as mineral exploration spending flat-lined with junior miners struggling to keep the lights on. But hey, that’s the boom-bust business of mining.

Those days seem a distant memory because the Yukon’s going through something of a mini-gold rush, with many of the world’s gold mining giants buying into local projects over the last 18 months. Goldcorp’s half-billion-dollar purchase of the Coffee project in 2016 got the ball rolling. Then in December 2016, Agnico Eagle bought nearly 20 percent of White Gold Corporation to help explore its deposits in the White Gold region. This March, Newmont announced it acquired roughly 13 percent of Goldstrike Resources and its Plateau gold project for $6 million. The following month, Barrick bought into the Orion portion of ATAC Resources’s Rackla project for $8.3 million. (It has an option to buy up to 70 percent of Orion for $63.3M.)

“This has been one of the quietest summers for foot traffic in the office because everybody’s out in the field." -Samson Hartland.

The word is out and it’s nowhere more obvious than at the Yukon Chamber of Mines office in Whitehorse. “This has been one of the quietest summers for foot traffic in the office because everybody’s out in the field,” says executive director Samson Hartland.

What does this mean beyond the immediate economic benefit to expeditors, airlines, hotels and the other spinoff industries tied to mining? The deep pockets the majors have will give junior mining companies the ability to define deposits and advance their projects, while also bringing more expertise into the territory. And based on the deals many of the majors signed, which allow them to take bigger stakes in projects as they become more attractive, this could be a long-term boon, says Hartland. “I get the impression these are not mines that are going to be opening up the next year, the year after that, or the year after that. These are projects that are going to get further proved out, de-risked and further defined for the respective companies while, at the same time, operating in this region gives them the opportunity to see what other potential may exist out there.”

It’s not all years away, either—Victoria Gold broke ground on its Eagle gold mine in August. CEO John McConnell says the company only needs another $40 million or so to complete construction. He hopes to begin production in early 2019.

BMC Minerals, a privately owned company backed by the U.K. bank Barclays, released a positive pre-feasibility study on its Kudz Ze Kayah zinc-copper-lead-silver-gold project, southeast of Ross River near the shuttered Wolverine mine. The mine would cost roughly $379 million to build, but pay for itself within two years, while employing 430 people through its nine-year mine life.

And the territory’s only mine currently in operation—Capstone’s Minto copper mine—got some good news this year too. Rebounding copper prices allowed it to extend its mine life by three years to 2020, keeping 300 jobs in the Yukon.

If you build it, will they come? Yukon's Resource Gateway ProjectIn September, Justin Trudeau came to Whitehorse for the first time since becoming prime minister. And he came bearing gifts, announcing hundreds of millions of dollars for Yukon highways. Among these are extensions and upgrades to the Dawson Range Road, to the Freegold Road and the Nahanni Range road. The roads would connect to advanced mineral development projects and provide better access for companies looking to explore surrounding areas.

Nunavut: things are moving ahead

You almost couldn’t have planned it any better. Nunavut now has a mine operating on Inuit-owned land in each of its three regions, with royalties flowing to the respective regional Inuit organizations. Still, market forces and technical issues meant 2017 wasn’t exactly a banner year.

First, the positives. In February, Agnico Eagle went all in on Nunavut when its board of directors gave the thumbs up on the Amaruq and Meliadine projects. This essentially green-lit more than $1 billion in spending to develop the two Kivalliq gold projects, which would see the company mining there until at least the end of the next decade. In 2017, the company budgeted more than $430 million toward the two projects—$73M at Amaruq and $360M at Meliadine—in a bid to have them both operational by late 2019.

In the Kitikmeot region, TMAC Resources’s Hope Bay achieved production on schedule. But it was far from a smooth year for the gold miner. The company experienced processing plant issues, which resulted in gold recoveries that were lower than expected. (The company decreased its 2017 production forecast from 130,000-140,000 ounces at the start of the year to 50,000-60,000 ounces.) As a result, the company’s stock fell from a high of $19.00 per share in February (following its first gold brick pour) to just more than $8 in mid-August, when it revised its production forecast.

And 2017 saw the resolution of a long-standing disagreement between Mary River iron ore operator Baffinland and the Qikiqtani Inuit Association. An arbitration panel ruled Baffinland owed the QIA $7.3 million in unpaid royalties. Baffinland will respect the ruling, a spokesperson said. It will also surely hope for iron ore prices to rebound.

If you build it, will they come? Nunavut's Grays Bay Port and RoadLong a dream of the resource development set, a highway and port project from the Arctic Coast into the heart of the barrenlands achieved a milestone this summer. In August, the Kitikmeot Inuit Association and the Nunavut government put the Grays Bay Port and Road project ahead for an environmental review by the Nunavut Impact Review Board. The plan would see a deep-water port constructed at Grays Bay on the Coronation Gulf, with an all-season road running south for 227 kilometres to connect with the end of the NWT ice road used by diamond mines. The road would run through a corridor with considerable mineral potential—many of these land parcels are Inuit owned. (The road would not connect to any Nunavut communities, but the government argues it would permit all-season resupply to the port and earlier and more frequent shipping to Kitikmeot towns.) But it would also traverse the calving grounds of Bathurst caribou, a herd in decline—a potential hurdle to the road’s approval and eventual construction.

What’s it going to cost? $500M (estimates)Who pays what? Too early to tell, but Nunavut wants the feds to cover up to 75 percentWho does it help? WPC Resources’s Ulu gold project and MMG Canada’s High Lake and Izok Lake zinc/copper projects. MMG put both projects on hold due to the prohibitive costs of developing its own transportation infrastructure.

Northwest Territories: things have been better

Diamonds still power the NWT economy, but as industry stalwarts Diavik and Ekati enter the later stages of their mine lives, the future looks uncertain.

In late 2016, Dominion Diamond Corporation (owner of Ekati and 40-percent owner of Diavik) laid off staff and moved its headquarters from Yellowknife to Calgary to save money. Then that summer, the company was sold for US$1.2 billion to a private buyer—a U.S. consortium called Washington Companies, owned by billionaire Dennis Washington. Patrick Evans, formerly the CEO of Mountain Province Diamonds and Kennady Diamonds, will become CEO of Dominion. (He declined to talk about the company’s future until the sale was finalized sometime in late October or early November.) In a press release, Dominion’s new owner stated its intention to keep the company’s offices in Canada and to extend the Ekati mine life by investing in the Jay Pipe and Fox Deep projects, which could keep it going until 2042. (Current reserves are slated to run out in 2023.) In the spring, Diavik’s mine life was extended by two years (to 2025) due to the development of its A-21 pit.

The opening of De Beers’s Gahcho Kué mine in late 2016 was a shot in the arm for the territory and it ramped up to commercial production without major issues by springtime. The mine should produce rough diamonds until 2028, with the potential to extend long after that.

Still, the NWT is desperate to add prospects to its pipeline. And while Kennady Diamonds, TerraX and other promising projects build towards feasibility, a new project from a familiar place has some speculators excited. Darnley Bay Resources acquired the Pine Point lead-zinc project on the old Pine Point mine property—complete with road and power-grid access. The company promptly changed its name to Pine Point Mining and released a positive preliminary economic assessment that’s helped them raise some money. Mining certainly is a cyclical business.

If you build it, will they come? Northwest Territories' Tłįcho˛All-Season RoadEarlier this year, the federal government announced it would fund a portion of the construction costs for a gravel highway that would branch off the Mackenzie Highway, just west of Behchoko, and run 94 kilometres north to the community of Whatì, population 500. Currently, Whatì is only accessible by plane year-round, though a winter road opens up for a couple months in late January. The GNWT submitted permits to land and water boards for construction approval.

What’s it going to cost? $150-$200M (est.)Who pays what? Feds put up 25 percent, the NWT covers the restWho does it help? Fortune Minerals’ NICO cobalt-gold-bismuth-copper mine. The company would build a 50-kilometre spur road to connect with its project.